Connect with us

Opinion

Tech Titans Bullish on Bitcoin

Published

on

If you reflect on the Trojan War, you might recognize some modern-day parallels. In the movie Troy, which is based on the Trojan war, Achilles, played by Brad Pitt, leads his rogue fighters and the Greek Army to take control of the city of Troy, which is guarded by great walls and a Hector-led Trojan army.

It’s a drawn-out battle filled with duels and sneak attacks from both sides, the famous and final one being the Greek army’s ability to infiltrate their way into the city walls through the gift of a Trojan horse. Perhaps Troy was a bit of foreshadowing on the global monetary system.

Bitcoin in a sense has been a surprise attack on fiat money. Nobody could have predicted a decentralized digital currency that would challenge the merits of a centralized monetary system that’s been in place for centuries. Now that it’s here, bitcoin and its digital currency soldiers aren’t going anywhere. And if you ask a couple of tech titans, bitcoin should subvert fiat currencies.

Tech Titans

Apple Co-Founder Steve Wozniak and Twitter CEO/Square Founder Jack Dorsey may not be leading armies of the usual kind. But they are tech giants whose influence has gone beyond corporate walls and changed the landscape of modern day technology as we know it. Both are bitcoin bulls and agree that bitcoin deserves the title as the single global currency.

Dorsey is a bit more aggressive about his prediction, having said that bitcoin will win the title as the sole global currency over the course of the next decade or sooner.

When asked about it, Wozniak softened the forecast a bit, saying: “I buy into what Jack Dorsey says. Not that I necessarily believe it’s going to happen. I just, I want it to be that way,” Wozniak said.

Ebbs and Flows

The Apple co-founder reportedly first bought into bitcoin at the $700 level. And even though he says it wasn’t an investment and more of an experiment, he still believes that the bitcoin price will continue to rise even if there are ebbs and flows along the way, similar to the internet during its rise.

Currently, the bitcoin price is experiencing one of those ebbs, having failed to break through the $7,600 level in a weekend rally and falling to about $7,443. While market bulls like Fundstrat’s Thomas Lee aren’t relenting on their forecasts for bitcoin $25,000, the trading volume since year-end 2017 at bitcoin’s pinnacle has dropped and some analysts predict it could get worse before it gets better.

Wozniak’s Portfolio

Wozniak told CNBC he likes bitcoin for its decentralized features that make it more natural, such as the public ledger technology underpinning the coin and the rewards system that keeps it going.

Wozniak’s cryptocurrency portfolio is comprised of one bitcoin and two ether, the former of which he owns for pure experimentation purposes. He likens Ethereum to a platform that tends to grow because “there tend to be lots of people working on applications.” Sounds like another platform that Wozniak knows a little something about.

Meanwhile, whether or not bitcoin overtakes fiat currencies, the digital currency that boasts a market cap of $127 billion is sure to be remembered, which if we could ask Achilles of the Trojan war is what it’s all about anyway.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

Rate this post:

Important for improving the service. Please add a comment in the comment field below explaining what you rated and why you gave it that rate. Failed Trade Recommendations should not be rated as that is considered a failure either way.
1 vote, average: 4.00 out of 51 vote, average: 4.00 out of 51 vote, average: 4.00 out of 51 vote, average: 4.00 out of 51 vote, average: 4.00 out of 5 (1 votes, average: 4.00 out of 5)
You need to be a registered member to rate this.
Loading...

4.5 stars on average, based on 16 rated postsGerelyn has been covering ICOs and the cryptocurrency market since mid-2017. She's also reported on fintech more broadly in addition to asset management, having previously specialized in institutional investing. She owns some BTC and ETH.




Feedback or Requests?

Opinion

IMF Official Urges Central Banks to Compete with Cryptocurrencies

Published

on

A high-ranking official at the International Monetary Fund (IMF) is urging central banks to developer “better” fiat currencies in order to maintain their leadership pace over cryptocurrency.

A Call to Innovation

In an article published Thursday, IMF deputy director Dong He makes the case that “crypto assets may one day reduce demand for central bank money” and that government institutions must do more to not let that happen. In other words, to “forestall the competitive pressure crypto assets may exert on fiat currencies,” central banks need to adopt some of the core concepts driving digital assets.

“Central banks must maintain the public’s trust in fiat currencies and stay in the game in a digital, sharing, and decentralized service economy,” he said.

The Washington-based institution is carefully evaluating cryptocurrencies, though it has not adopted a formal position on the matter. However, it has urged governments to utilize technology to offset the risks posed by digital currencies (or as IMF chief Christine Lagarde says, “fight fire with fire”).

In the article, He seems to argue in favor of a central bank digital currency, but didn’t offer a rubric for implementation.

Central Banks and the Blockchain Divide

Many in the blockchain community believe crypto offers the best alternative to the fiat banking system and its hyper-inflationary nature. In the current system, central banks control a vital means of production: capital. By controlling the money supply, central banks have enormous power, including discretion to print money, adjust interest rates and set the reserve requirement.

As He stated in his paper, some cryptocurrencies like bitcoin have limited inflation risk because their supply is capped. Of course, he offered a caveat: bitcoin is not as well equipped to handle the risk of “structural deflation.”

Although they were initially resistant to the idea of blockchain, central banks are now widely exploring its use. It is unclear whether this will result in widescale adoption of a centrally administered cryptocurrency or whether blockchain technology will enable the current monetary system to operate more efficiently. Of course, for crypto purists, the idea of a central bank-run crypto asset is itself a contradiction.

By adopting blockchain technology, central banks are essentially following in Wall Street’s footsteps – not in terms of blockchain itself, but in embracing innovation. As we’ve seen repeatedly, the wheels of innovation churn very slowly at major financial institutions and it often requires disruptors (startups) to open the door to new business opportunities. We’ve seen it with mobile, apps, big data, cloud computing and now the blockchain.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

Rate this post:

Important for improving the service. Please add a comment in the comment field below explaining what you rated and why you gave it that rate. Failed Trade Recommendations should not be rated as that is considered a failure either way.
2 votes, average: 5.00 out of 52 votes, average: 5.00 out of 52 votes, average: 5.00 out of 52 votes, average: 5.00 out of 52 votes, average: 5.00 out of 5 (2 votes, average: 5.00 out of 5)
You need to be a registered member to rate this.
Loading...

4.6 stars on average, based on 458 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




Feedback or Requests?

Continue Reading

Opinion

Yale Economist Robert Shiller Has Little Faith in Cryptocurrencies

Published

on

Yale economist Robert Shiller warns that for all their innovation, the new money that is cryptocurrencies is an experiment that in the end may fall short. According to Shiller in a blog post posted today, computer programmers are the only ones who get cryptocurrencies enough to explain them, which he suggests “creates an aura of exclusivity”, attaches a certain “glamour” to this “new money” and inspires the devout loyalty within blockchain circles.

It’s déjà vu for Shiller, who has seen this all play out before in the history books, each time over the past 100-plus years ending in utter failure. This time it’s the rise of some 2,000 digital currencies and millions of believers who are not deterred by the smoke signals that regulators are sending up. Cryptocurrencies aside, money “is rich in mystique,” he says, and fueled by the faith that people and institutions place in it.

Shiller harkens back to the Cincinnati Time Store, which was a retail store in the 1800s founded by Josiah Warner and fueled by labor notes as well as “time money” surfaced shortly thereafter, which relied on time instead of precious metals. Neither of those experiments succeeded.

The revolution, he says, is nothing new, and the shine associated with reinventing money eventually grows dim.

“The cryptocurrencies are a statement of faith in a new community of entrepreneurial cosmopolitans who hold themselves above national governments, which are viewed as the drivers of a long train of inequality and war.” – Shiller

Shiller taps into the emotional case for cryptocurrencies, suggesting that the allure of new money is shrouded in the mystery of “advanced science.” Perhaps.

But while payments are a key application of cryptocurrencies, they’re not the only use case. And blockchain and cryptocurrencies have a symbiotic relationship, one in which neither wouldn’t exist without the other. But not once in his epilogue does he mention blockchain, the very technology that sets cryptocurrencies apart from historical attempts at new money, or the $143 billion market cap achieved by bitcoin alone currently.

‘A Clever Idea’

Shiller is a Nobel prize winner for his theory on asset prices. His Twitter profile evokes Alan Greenspan’s Fed with a description as being “irrationally exuberant.” Shiller actually shines when he is predicting doom and gloom, having presciently called both the bursting of the dot-com bubble and the housing crisis.

As economists go, Shiller has been more open-minded about bitcoin than his peers, his prediction for a “total collapse” notwithstanding. Shiller once called bitcoin a “clever idea.”

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

Rate this post:

Important for improving the service. Please add a comment in the comment field below explaining what you rated and why you gave it that rate. Failed Trade Recommendations should not be rated as that is considered a failure either way.
1 vote, average: 4.00 out of 51 vote, average: 4.00 out of 51 vote, average: 4.00 out of 51 vote, average: 4.00 out of 51 vote, average: 4.00 out of 5 (1 votes, average: 4.00 out of 5)
You need to be a registered member to rate this.
Loading...

4.5 stars on average, based on 16 rated postsGerelyn has been covering ICOs and the cryptocurrency market since mid-2017. She's also reported on fintech more broadly in addition to asset management, having previously specialized in institutional investing. She owns some BTC and ETH.




Feedback or Requests?

Continue Reading

Opinion

How Monetary Goods Compare: Bitcoin, Gold and the U.S. Dollar

Published

on

One of the most common arguments against the value of cryptocurrencies, and monetary ones like bitcoin in particular, is how they compare to current assets. Gold and the U.S. dollar are the two counter-examples which get used the most, which is why it can be helpful to compare each of their attributes to figure out where each one shines.

Monetary goods can be compared on a few different terms. Gold was the original “money,” but we presently use fiat currency, and are talking about the bitcoin as being the future of monetary assets.

Scarcity and Verifiability

The first thing that needs to be compared is whether they are scarce or not. In this regard, fiat currency is actually the least scarce. The last few decades have seen many politicians print more money to create short-term solutions, but this means the scarcity is almost non-existent.

Gold fares better, as there is a limited amount available at any time, but if there were any innovations in mining technology, the supply could increase immediately. Bitcoin is actually the most scarce (despite what detractors might say) because there will only ever be 21 million bitcoins and the schedule of their mining is relatively fixed.

In terms of verifiability, bitcoin also beats both gold and fiat currency. Counterfeits of both exist, but there are no passable counterfeits for bitcoin. In terms of durability, gold triumphs over all since it is relatively robust, but fiat can be destroyed quite easily. Bitcoin falls in the middle, as it can be destroyed if the network is destroyed or the private keys are lost.

Portability

This plays in a bit with being scarce and verifiable, but is most of all about the ability to cross borders with the coin or send money all the way across the world. It is hard to argue that gold or fiat currency are easier to do either of these with.

The capital controls and government regulations present in the world make it very hard to send fiat currency to other countries. However, with cryptocurrency, you can just put the money on a USB drive and go anywhere.

Censorship Resistance

One of the key factors that makes bitcoin so powerful is its inability to be censored or controlled. The First Amendment is all about free speech and the right to say what you want, and there needs to be a corresponding right that applies to currencies. Being able to fund what you wish without gaining the permission of another entity is what makes the network so valuable.

The presence of gatekeepers in the fiat system is a lot of what has created such strong demand for a censorship resistant currency. Governments have outlawed certain uses of currency (e.g. illicit drugs or sex trafficking), which is clearly a good for the world. But at the same time, if one was trying to flee China, it would not be possible to do so while maintaining a hold on all their fiat currency. This is where the opportunity for bitcoin begins.

Understanding Monetization

Now that we’ve compared these goods on several different dimensions, we can see that bitcoin has merit compared to gold or USD in some respects. The only thing that it lacks is an established history, having been created in 2009. This is important because it enables the path from inception to widespread use. which is referred to as monetization. The process can take a long time, but there are a few things we can expect.

The prices will naturally continue to go up above the intrinsic value of the good, as a monetary premium is necessary. Monetary premiums are the difference between the market value and intrinsic value of a cryptocurrency. A dollar is worth far more than the paper it is printed on and the utility of a bar of gold is less than 10% of its current market value.

The increases in price are expected, since each monetary good must rise above its intrinsic value to a market derived value. Bubbles are a standard part of the monetization process, which is counter-intuitive to what we’ve heard so far. This can look like a bubble to doubters, but it is only a bubble if it pops. If it doesn’t it is just the market searching for an appropriate monetary premium for the cryptocurrency. In the end, there is no objectively correct monetary good in the world and network effects and evangelization are key.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

Rate this post:

Important for improving the service. Please add a comment in the comment field below explaining what you rated and why you gave it that rate. Failed Trade Recommendations should not be rated as that is considered a failure either way.
2 votes, average: 5.00 out of 52 votes, average: 5.00 out of 52 votes, average: 5.00 out of 52 votes, average: 5.00 out of 52 votes, average: 5.00 out of 5 (2 votes, average: 5.00 out of 5)
You need to be a registered member to rate this.
Loading...

3.5 stars on average, based on 12 rated posts




Feedback or Requests?

Continue Reading

11 of 15 Seats Available

Learn more here.

Recent Comments

Recent Posts

A part of CCN

Hacked.com is Neutral and Unbiased

Hacked.com and its team members have pledged to reject any form of advertisement or sponsorships from 3rd parties. We will always be neutral and we strive towards a fully unbiased view on all topics. Whenever an author has a conflicting interest, that should be clearly stated in the post itself with a disclaimer. If you suspect that one of our team members are biased, please notify me immediately at jonas.borchgrevink(at)hacked.com.

Trending